Custom, Excise & Service Tax Tribunal
Cmc Limited vs Noida on 27 July, 2018
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL
REGIONAL BENCH : ALLAHABAD
COURT No. I
MISC Application Nos. ST/MISC/70048 & 70047/2018
APPEAL Nos. ST/57648/2013-CU[DB] & ST/51048/2014-CU[DB]
Sr. Appeal No. Impugned Order Passed By
No.
1. ST/57648/2013 Order-in-Original Commissioner
No.61/Commissioner/Noida/2012-13
of Customs,
Dated 27/02/2013 Central
Excise &
Service Tax,
Noida
2. ST/51048/2014 Order-in-Appeal No. Commissioner
NOI/EXCUS/000/APPL/171/13-14 of Customs,
Dated 26/08/2013 Central
Excise &
Service Tax,
Noida
M/s Tata Consultancy Services Ltd. Appellant
Vs.
Commissioner of Service Tax, Delhi Respondent
Appearance:
Shri B. L. Narsimhan (Adv.) & Shri Utkarsh Malviya (Adv.) for Appellants Shri Rajeev Ranjan (Addl. Commr.) AR for Respondent CORAM:
Hon'ble Mr. Ashok Jindal, Member (Judicial) Hon'ble Mr. Anil G. Shakkarwar, Member (Technical) Date of Hearing : 27/07/2018 Date of Decision : 27/07/2018 FINAL ORDER NOs. - 71816-71817/2018 Per: Ashok Jindal The appellant is in appeal against the impugned orders wherein demand of service tax under the category 2 APPEAL Nos. ST/57648/2013-CU[DB] & 51048/2014-CU[DB] of 'Business Auxiliary Services' has been confirmed against the appellant for the period 2010-11 to 2011-12. The appellant has also filed Miscellaneous Application for change of cause title of the appeals.
2. It is the contention of the learned counsel for the appellant that the appellant has changed their cause title from CMC Ltd. to Tata Consultancy Services Ltd. To the extent, they have filed the order of the Hon'ble High Court, Bombay, wherein their name has been changed to Tata Consultancy Service Ltd.
3. Considering the fact that the appellant has merged with M/s Tata Consultancy Service Ltd. Therefore, the cause title of the appellant is changed to Tata Consultancy Services Ltd. Accordingly, Miscellaneous Application is disposed of.
4. The demand of service tax has been confirmed against the appellant under the category of 'Business Auxiliary Service' during the impugned period for the activity of computerization of Excise and Taxation Technical Service Agency, the authority of Punjab Government, during the period from 2010-11 to 2011-12. 3 APPEAL Nos. ST/57648/2013-CU[DB] &
51048/2014-CU[DB]
5. The learned counsel for the appellant submits that in their own case for the earlier period passed by this Tribunal in Final Order No.52251/2018 dated 18/06/2018 has held that the appellant is not liable to pay service tax. Therefore, the impugned orders are to be set aside.
6. Heard the parties.
7. Considering the fact that the issue has been examined by this Tribunal in their own case for the earlier period, wherein this Tribunal has observed as under:-
"13. First we take up the issue of demand of Service Tax under the category of Business Auxiliary Service. The definition of BAS is reproduced below; Section 65(19) „Business Auxiliary Service‟ means any service in relation to:-
(i) Promotion or marketing or sale of goods produced or provided by or belonging to the client; or
(ii) Promotion or marketing of service provided by the client;
or 4 APPEAL Nos. ST/57648/2013-CU[DB] & 51048/2014-CU[DB]
(iii) Procurement of goods or services, which are inputs for the client or
(iv) Production or processing of goods for, or on behalf of the client; or
(v) Provision of service on behalf of the client; or
(vi) A service incidental or auxiliary to any activity specified in sub-clause (I) to (VI) such as billing, issue or collection or recovery of cheques, payments, maintenance of prospective customer or vendor, public relation services, management or supervision, and includes services as a commission agent, but does not include any information technology services and any their activity that amounts to "manufacture" within the meaning or clause (f) of Section 2 of the Central Excise Act, 1944.
Explanation:- For removal or doubts, it is hereby declared that for the purpose of this clause, "Information technology service" means any service in relation to designing developing or maintaining of computer software, or computerization, data processing or system networking or any other service primarily in relation to operation of computer system;"
5 APPEAL Nos. ST/57648/2013-CU[DB] &
51048/2014-CU[DB] w.e.f. 16/06/2005, the following Explanation was added to the sub-clause (vi) of the Section 65(19) "Explanation-For removal or doubts, it is hereby declared that for the purposes of this Section 65(105) (zzb) Taxable service‟ means any service provided or to be provided to a client by any person in relation to Business Auxiliary Service"
14. Revenue is of the view that the activities carried out in terms of the agreement with ETTSA, but out sourced to M/s HSCL is covered by the sub category „Procurement of Goods or Services which are inputs for the client‟. As per the agreement with ETTSA, the appellant has been entrusted with the work of computerization of the Sales Tax System and operation of the same. A part of this work pertaining to setting up of the WAN connection has been sub-contracted to HSCL. The agreement with HSCL is to provide. Establish and operate Wide Area Network (WAN) using a mix of Land Optical Fibre Network and VSAT based network to provide the connectivity as a whole with required equipment, and bandwidth as per the agreement between CMC and ETTSA.
15. The nature of the above activity is evidently in the form of system networking, since it involves interconnection of the 6 APPEAL Nos. ST/57648/2013-CU[DB] & 51048/2014-CU[DB] computer systems working in 98 different sites by set up of Wide Area Network. The Explanation which is appended at the end of the definition in Section 65 (19) for BAS explains what constitutes „Information Technology Service‟. One of the activities subsumed within the IT service is the activity of "system networking". Hence leads us to conclude that the activity out sourced to HSCL was in the nature of Information Technology Service. The definition of BAS has excluded Information Technology Services, through the above Explanation. Consequently, we are led to the conclusion that even if the appellant has procured the service of establishing WAN through the outsourced service provider HSCL, the activity will not be covered within the definition of BAS.
16. Another argument advanced by the appellant in resisting the levy under BAS is that the service procured by them for ETTSA through HSCL is not in connection with any business of the client who is an arm of the Government of Punjab. Thus in the present case the service rendered by the appellant has been rendered to a Government Department which are not engaged in business but in rendering public services. Hence the procurement of service for ETTSA cannot be brought within the levy of service tax under BAS. This view finds support in the very many case laws cited by 7 APPEAL Nos. ST/57648/2013-CU[DB] & 51048/2014-CU[DB] the appellant. In the result we conclude that the levy of service tax on the activity of setting up of WAN, which has been outsourced to HSCL is not justifiable and hence, the demand is set aside."
and it was held that appellant is not liable to pay service tax on the amount received from Punjab Government for renovation of Technical Programme given by them for Excise and Taxation Technical Service Agency.
8. In view of the precedent decision in appellant's own case, it is held that the services provided by the appellants do not qualify as 'Business Auxiliary Services', therefore, the demands against the appellants are set aside. Accordingly, the impugned orders are also set aside.
9. In result of this, the appeals are allowed with consequential relief to the appellants, if any.
(Dictated & Pronounced in Court)
Sd/- Sd/-
(Anil G. Shakkarwar) (Ashok Jindal)
Member (Technical) Member (Judicial)
Lks